Advances

9 Months Ended

Sep. 30, 2020


Note 7 – Advances


	September 30, 2020		December 31, 2019
Principal and interest	$	299,355	$	414,846
Taxes and insurance	342,704		422,383
Foreclosures, bankruptcy, REO and other	196,623		229,219
	838,682		1,066,448
Allowance for losses	(6,078)		(9,925)
Advances, net	$	832,604	$	1,056,523

The following table summarizes the activity in net advances:


	Nine Months Ended September 30,
	2020		2019
Beginning balance	$	1,056,523	$	1,186,676
Asset acquisitions	14		1,457


New advances	667,577		394,964
Sales of advances	(604)		(747)
Collections of advances and other	(894,753)		(557,868)

Net decrease in allowance for losses (1)	3,847		13,962
Ending balance	$	832,604	$	1,038,444

(1) As disclosed in Note 1, there was no significant adjustment as of January 1, 2020 as a result of the adoption of ASU 2016-13. Servicing advances are generally expected to be fully reimbursed under the terms of the servicing agreements. The estimate for the allowance for losses is based on relevant qualitative and quantitative information about past events, including historical collection and loss experience, current conditions, and reasonable and supportable forecasts that affect collectability. The allowance for losses includes an estimate for claimable (with investors) but nonrecoverable expenses, for example due to servicer error, such as lack of reasonable documentation as to the type and amount of advances.


Allowance for Losses	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Beginning balance	$	7,820	$	27,653	$	9,925	$	23,259
Provision	2,173		729		5,944		4,532
Net charge-offs and other (1)	(3,915)		(19,085)		(9,791)		(18,494)
Ending balance	$	6,078	$	9,297	$	6,078	$	9,297

(1)$18.0 million allowance related to sold advances was reclassified in the third quarter of 2019 and presented as Other liabilities (Liability for indemnification obligations).